I am delighted to be here in Phnom Penh to speak to you this morning. I am very grateful to you Prime Minister Hun Sen and to Minister Cham Prasidh for hosting this event. And I thank also the many business organisations that have put in the practical work needed to bring us all here together.

As I understand it, mine is the first visit by a European Commissioner to Cambodia for some time.

And it comes at a good moment. At the end of last year the European Union celebrated a significant milestone in its relations with Cambodia by upgrading our delegation here to the status of a full diplomatic mission.

That change is a recognition of how seriously Europe takes our relations with Cambodia. And I know it will mark the beginning of closer friendship between our people.

But it is also a sign of how the whole South East Asian region is seen as crucial in Brussels and other European capitals.

We are celebrating 35 years of EU-ASEAN cooperation this year.

That is a long time. But let me assure you that in Europe we feel no fatigue, only a strong appetite to deepen our ties even further.

That is why events such as the EU-ASEAN Business Summit are so important. Because by bringing our businesspeople closer together we bring our economies and societies closer together. And that is vital for the future success of both our regions.

I'd like to take a few minutes this morning to talk to you about why the EU ASEAN economic relationship is so important,

about what we are doing in government to encourage further cooperation,

and about your crucial role as businesspeople in that process.

Let me start by explaining how trade and investment fits in with our overall strategy for jobs and growth in Europe.

In Europe we know that in future 90% of economic growth in the world will happen outside our borders. A huge proportion of that growth will happen in the ASEAN region.

Far from seeing this as a threat, we Europeans see the stunning growth figures in Asia as part of the solution to our economic challenges.

First, because European companies are already intimately connected to that growth. We know, for instance, that the European economy is already 36 million jobs better off as a result of our open trade policy.

And second, because we have the opportunity to strengthen those connections even further through engagement with regions like ASEAN.

At €160 billion per year, Europe accounts for over 10% of ASEAN's total trade in goods. The percentage for services is even higher – at 13% of the total.

These figures probably underestimate the total trade between our two regions as today's global supply chains mean that of ASEAN's exports to China often end up in products eventually shipped to Europe.

On top of this, stocks of bilateral investment stand at 260 billion euro and bilateral investment flows were over 31 billion euro in 2010. European investment in ASEAN accounts for a quarter of the yearly total.

Our trade and investment relationship already contributes to growth in both our economies.

As a result, some of you might be concerned about the economic news from Europe in recent months.

Let me reassure you.

There is no doubt that some parts of Europe face serious challenges at present. But Europe as a whole is doing much better than you might think.

Sure, parts of the euro zone, particularly the south of Europe, are going through a tough time. A painful adjustment process is needed to work off excesses built up before 2007. The shock of the financial crisis has also raised the spectre of default in some European countries, which would have grave consequences for the international financial system.

These problems are very serious.

However, the European Union has made good progress towards solving them. We have enhanced budget discipline through the European Fiscal Compact and we have put in place significant financial firewalls to prevent any backsliding.

We are also moving forward on our strategy to kick-start economic growth. In fact, the crisis is allowing governments to finally grasp the nettle and carry out many difficult but vital structural reforms. As I mentioned, our open international trade and investment policy is also a key part of those efforts.

But beyond this good progress, I feel I must point out that even today we are in pretty good health, despite initial appearances.

The EU remains the world's biggest trading power. Our goods exports rose by almost 60% - to 1.3 trillion euro - in the decade to 2010. Imports rose by 51% to 1.5 trillion euro. While we do have a trade deficit, it is largely caused by our significant oil and gas bill. In manufactured goods our significant surplus of almost 190 billion euros has trebled over the last decade.

The EU's share of world exports has remained stable at around 20% of the total over the last decade. Over the same period, the US and Japanese shares fell by six percentage points each to hit 12% and 6%, respectively.

The EU also maintains its global leadership in high-value-added products – we account for 30% of total exports - and high-tech products – where our share was 17% in 2007.

More fundamentally, it is just plain wrong to say that Europe as a whole has a problem of competitiveness or that we live beyond our means. Just look at our current account, which is, by a small amount, in surplus. In addition, the euro remains and will stay the second reserve currency in the world.

That is good news, because the European Union and ASEAN have a great deal of work to do together.

We need a comprehensive, 21st century free trade agreement between our two regions. It should tackle the full range of barriers that obstruct flows of goods, services and investment between our regions.

That means not only eliminating tariffs, but also:

tackling regulations that block trade in goods and services,

improving the protection of intellectual property rights and

securing access to markets for government procurement;

all within a legally binding framework.

You may say that that sounds like a tall order. And indeed it will take some time.

But I am happy to tell you that we are making concrete progress towards that objective:

Our bilateral negotiations with Singapore are close to conclusion we are making good progress with Malaysia.

I am also happy to announce that here in Phnom Penh we decided with my Vietnamese colleague Minister Hoang to launch FTA negotiations after having concluded the scoping exercise last week.

And I hope that we can advance discussions also with other ASEAN partners in the coming months.

But I want to make very clear that as we engage in these negotiations our overarching goal of regional integration remains clear. That goal is made even more important by the programme to build an ASEAN Economic Community by 2015, which we fully support.

We have momentum now. I hope we can use it to get to the critical mass that will allow us to come back to the regional process very soon.

But of course no matter what we policymakers achieve together, we will have very little impact without an active private sector.

I am a liberal by political conviction. I strongly believe that the role of government in economic policymaking is to remove barriers so that business can generate growth and jobs. That is what we do in trade negotiations – we try to get governments out of the way as much as possible.

And that is why today's business summit is so important.

Of course it is a good opportunity for policymakers like me to hear your advice on what we can do better. And I look forward to hearing the recommendations you have for us.

But what are much more significant are the discussions you have with each other.

Because it is you as business leaders who build our economic relationship.

The commercial relationships you create deliver the jobs and growth our countries and regions both need.

So I hope that you understand that responsibility and take it with you in today's important discussions.